Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.

These cases can go on and on

This housing market is like a clogged toilet,that keeps getting more backed up..what it needs is these foreclosures to be flushed through and get things flowing again..

You have so many borrowers now clogging the system,people who stop paying and try to hold out as long as possible living free,and the startegic walk ones ...the more I see this,keep pushing back any hope of recovery..Could we see a rebound in possibily 10 years in housing market? I dont expect anything strong,but as least postive again> is that way too optimistic?

Not to mention the houses that the banks are sitting on not even for sale!

I have about 3-4 walking routes that I do a week. Over the last few years I have seen a number of houses that the bank tried to sell for 3 months. They did not sell and have been off the market for over a year now. Have to wonder how many of them we have as well.

I want the housing market to come back as much as the next person but my gut tells me its going to be more than 3-5 years.

I guess it all depends on which side of fence your on,if your a seller right now,it must be just unbelievably hard,if your a buyer,so much inventory,it must feel like feeding frenzy trying to find the best deal with so many houses.

How are the houses supposed to be "flushed through"? Are you proposing to demolish them?

House prices went up too fast compared to income. The cost of a house needs to be tied to the wages of the people that need a place to live. Its simple math.

Many of the people in their homes are underwater. They are locked in. No equity. Can't refinance. Can't move. The choices for an individual are walk away or wait it out.

For the system as a whole the only option is to wait, because incomes take time to rise. People need time to get on their feet, reduce debt, build equity, save, and get to a place where they are able to buy again.

Ted Valentine wrote:
Many of the people in their homes are underwater. They are locked in. No equity. Can't refinance. Can't move. The choices for an individual are walk away or wait it out.

I'm in Arizona - a real estate nightmare. There seem to be some good deals but the market has not turned around yet.

Here you can walk away without the bank coming after you on your first mortgage (if it's the original mortgage). My understanding is that there are cases where they can come after you on the second but it's not common.

Ted Valentine wrote:
For the system as a whole the only option is to wait, because incomes take time to rise. People need time to get on their feet, reduce debt, build equity, save, and get to a place where they are able to buy again.

Incomes will continue to fall as jobs are shipped overseas and unions are busted.

I also think the housing market will hurt for a long while. We've avoided pain by borrowing money for a long time and now we've got to flush the system out.

When we built a system on extreme leverage, we took the flexibility out of decision making.

My daughter the economist explains that wages have to fall and we should have let the banks go bust. That it would have been short and extremely painful. But with a system built on leverage where people have borrowed to the limit letting the system self-correct would be extremely painful to real people.

Of course the option is what we've done the last decade which is the same as taking a drink to make the hangover go away.

I just accept that this is going to go on until it's over at whatever level that is and remind myself that housing is an expense not an investment but we've got to live somewhere.

Ted Valentine wrote:
For the system as a whole the only option is to wait, because incomes take time to rise. People need time to get on their feet, reduce debt, build equity, save, and get to a place where they are able to buy again.

Incomes will continue to fall as jobs are shipped overseas and unions are busted.

I'm in Phoenix, which was one of the hardest hit housing markets fueled by speculators and all the other excesses of the sub-prime mess. That said, an article in the Arizona Republic showed data that indicates that more foreclosures are being sold vs new foreclosures. The overall inventory of unsold houses is starting to decline. We are far from a robust housing situation here, but perhaps the worst is over in one of the hardest hit markets.

I know someone buying a 2100 sq. ft., 4BR, 2-bath, 3-car attached garage house, on a .3 acre lot that was built in 2002. It was valued at the top of the market for $365K. Zillow currently estimates the value of the house at $136K. My friend is buying it on a short sale for $113K.

Heard on the radio the other day that 15-year, fixed rate mortgages are at 3.65%.

Nobody knows the future, but with prices and mortgage rates that low, now is very likely a wonderful time to buy.